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The car company formerly known as Fiat and Chrysler is punching China coordinates into its dashboard GPS.
According to a Bloomberg report on Wednesday, Stellantis is seeking a strategic electric vehicle partner in the Middle Kingdom to help drive business in the world’s largest auto market. The news comes just a year after the company shuttered most of its Chinese operations.
Drive to Survive
Stellantis may be the world’s fourth-largest automaker, but it’s barely made inroads in China. Through the first half of the year, roughly just 2% of its sales came from China, India, and the Asia Pacific region, the company recently shared. That’s unsurprising, given that the company closed its sole Jeep factory in China in July 2022, a shift CEO Carlos Tavares labeled as an “asset-light” strategy predicated on vehicle imports rather than domestic manufacturing. Meanwhile, CFO Richard Palmer admitted last year that the company would operate in China as “somewhat of a niche player.”
But it’s hard to entirely steer clear of a potential customer base of 1.4 billion people, no less one that was home to nearly 60% of all EV sales in 2022, and where 535,000 battery-powered EVs were sold in the month of June alone, according to data from the China Association of Automobile Manufacturers. Now, sources tell Bloomberg, Stellantis is looking for inside help to remain “asset light” while muscling into a market dominated by local players like BYD and Changan:
- Stellantis is considering both a business partnership and an outright investment in a local EV firm. In particular, it explored a strategic partnership with Hangzhou-based Leapmotor, sources told Bloomberg.
- A joint venture wouldn’t be new. Stellantis still manufactures Peugeot and Citroën cars in partnership with Dongfeng Motor Group, and the Jeep plant had operated in partnership with Guangzhou Automobile Group.
Beep Beep: Stellantis isn’t even the first Western automaker to mull a partnership with Leapmotor. Earlier this month, Chinese media outlet Cailian Press reported that Volkswagen held talks with Leapmotor on a potential partnership to produce its Jetta cars. That followed a $700 million investment by Volkswagen into Chinese EV-maker Xpeng to develop two new VW-branded EVs for the Chinese market. In other words, the race is on.